Belgaum-based Vishwaraj Sugar Industries (VSL) expects to launch its Rs 374-crore initial public offer (IPO) in February-March this year.
The company expects to use the IPO proceeds to double its sugarcane crushing capacity to 11,000 tonnes crushed a day (tcd) from the present 5,500 tcd at Bellad Bagewadi in Belgaum district, Karnataka. The location of VSL’s factory is classified as a high-recovery zone for sugar production.
Production from the expanded capacity is likely to commence in the 2014-15 sugar season, said Mukesh Kumar, Executive Director, VSL.
The company also plans to expand its co-generation capacity to 66 MW from the present 30 MW, he said. The integrated sugar company also plans to expand its distillery capacity from 35 kilo litres per day (KLPD) to 100 KLPD.
“The expansion of the distillery will increase the production capacity of India Made Foreign Liquor (IMFL) to 5,000 cases a day from the present 2,500 cases a day,” Kumar added.
The total expansion cost of the project is pegged at Rs 425 crore, for which the company is raising Rs 70-crore of long-term debt from the Bank of India. For 2011-12, VSL reported a net profit of Rs 52 crore on a turnover of Rs 425 crore (Rs 43 crore on income of Rs 354 crore the previous year).
VSL has signed a power purchase agreement with Tata Power Trading Company to sell 23 MW from its proposed expansion of co-generation capacity.
At present, the company sells 14 MW to Tata Power Trading Company and 7 MW to Hubli Electricity Supply Company under a long-term PPA.
Realisations from power sales were Rs 38 crore in 2011-12. In the current financial year till end-December, power realisations stood at Rs 36 crore, Kumar said.
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